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The Koppamurra Project is a frontier ionic clay rare earth opportunity in South Australia and Victoria, Australia.

Overview

The Koppamurra Project, which is 100% owned by Australian Rare Earths (AR3) has all four key rare earth elements which are important for the production of rare earth permanent magnets. Koppamurra has a Substantial JORC Resource of 81.4Mt at 785ppm TREO (Total Rare Earth Oxide) and is a clay hosted deposit.

Koppamurra has immense growth potential. The Resource defined to date is < 5% of the total exploration tenure.

The key advantage of Koppamurra is the relatively high total proportion of rare earths used in the production of rare earth permanent magnets (REPMs) which, based on test work to date, have been shown to be relatively easy to recover. These characteristics of Koppamurra indicate that, as these four rare earths, namely praseodymium, neodymium, terbium and dysprosium, will constitute over 92% of the revenue of the Project’s output, the production process, will be simpler than other projects which may separate all the rare earths contained in other rare earth minerals.

Adamas Intelligence (an expert commentator on the rare earths market which provide independent research and advice on markets for critical metals and minerals) forecasts the share of value attributed to REPM demand will continue to increase with strong demand growth for these REOs at 9.1% per annum to 2030 driven by EV traction motors and wind turbines. Adamas Intelligence also forecasts shortages of these high value REOs with persistent undersupply from 2023 and declining inventories in China.

Importantly, this translates into a compelling basket price for Koppamurra ore in comparison with incumbent producers both at current and forecast prices.
The next 12 months is shaping up to be an extremely busy and exciting period for AR3, with strong potential to quickly increase resources and to progress development studies on a low capex, high margin rare earth operation. Resource expansion and development drilling is expected to be underway by Q3 2022 Stakeholder engagement and discussions with off-takers and downstream partners is progressing and a development pathway targeting first production in 2025/26 has been identified. Our aim is to become a global supplier of added-value rare earth products, working alongside government, academia, community and landowners.

Koppamurra Trial Pit Site Preparation

Mineral Resource Estimate

The recently updated Mineral Resource Estimate (ASX 4 July 2022) of 81.4Mt at 785ppm TREO (total rare earth oxide) incorporates the results from two completed drilling programs announced to the ASX in February 2022 and April 2022, which also highlighted a ~30% increase in dry bulk density (1.40 to 1.78 t/m3), a potential 6km northerly and 2km southerly extension to the initial April 2021 Mineral Resource, and record
grades of up to 15,500ppm TREO.

The overall program added 21,400m (2,057 holes) to the existing 4,785m (670 holes) drilled for the Maiden Inferred Resource Estimate announced in April 2021. Interpretation of geological samples and chemical assay data using relevant industry standard methods resulted in a significant increase in overall resource tonnes, resulting in a JORC Mineral Resource Estimate (MRE) for the Koppamurra clay-hosted rare earths project, located on the South Australian-Victorian border, increasing it by 104% to 81.4Mt at 785ppm TREO, and which included the delivery of the first JORC Indicated Resource for the project of 45Mt at 835ppm TREO.

The evaluation also revealed the potential for regional extension with an Exploration Target of 90 to 220Mt subject to additional drilling. Note: The potential quantity and grade of the Exploration Target is conceptual in nature, as there has been insufficient exploration undertaken to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

Estimation methodology

The JORC Resource Classification for the July 2022 Mineral Resource Estimate was supported by drill hole spacing, geological continuity and variography of TREO, TREO-CeO2 and CREO of the target mineralised domain Zone 3.

The classification of Indicated and Inferred resources was supported by all the criteria included in an assessment of geology and geological interpretation, sampling and sub-sampling techniques, drilling techniques and sample analysis method. A significant Exploration Target has also been defined which can be used to determine areas of significant prospectivity for future drill programmes.

As a Competent Person, IHC Mining Geological Services  Manager, Greg Jones, considers that the result appropriately reflects a reasonable view of the deposit categorisation.

Cut-off grades, including basis for the selected Cut-off Grade

The selection of the TREO-CeO2 cut-off grade used for reporting was based on the experience of the Competent Person and given the early stage of the Koppamurra project, this cut-off grade was selected based on a peer review of publicly available information from more advanced projects with comparable mineralization styles (i.e., clay-hosted rare earth mineralisation) and comparable conceptual processing methods. Material above this cut-off generates a head feed grade of over 700 ppm, and in the opinion of the Competent Person meets the conditions for reporting of a Mineral Resource with reasonable prospects of economic extraction.

Mining and metallurgical methods / material modifying factors

No specific mining or metallurgical methods or parameters were incorporated into the modelling process. Representative material from the current drilling programme will be utilized in ongoing metallurgical testwork.